The start of a new year and the creation of those good old new year resolutions is a perfect time to take stock and consider what you need to do to ensure your retirement is exactly what you want it to be.
Now, this could include a visit to an Independent Financial adviser, who can tell you that you could reduce the charges on your pensions, perhaps improve the returns while accepting less risk or even discover how much you invest monthly to have a “good pension pot”.
Now, all of the above are good actions to take and definitely worth considering, but working that way misses one important issue. It’s not overly exciting and how do you know what a “good pension pot” is or what it will actually mean to you.
For me, there is a better way – work backwards from that dream retirement to today.
How much income (in todays figures) do you want? What lifestyle would you like to have? This includes meals out, weekends away, holidays (including that once in a lifetime trip), hobbies you want to pursue… hopefully you get the idea.
What you want to avoid, is the thought that “we won’t have the mortgage”. You are most likely right, you won’t have the mortgage, but would you like to have that money to spend on other things? How will you buy your cars and motorbikes, and how do you want to buy them? Cash, HP or lease?
You will find our series on planning for retirement via this link, where we discuss the above as well as the various sources of income you might want to include in your calculations. From there you can then plan your retirement, and while there may still be no guarantees that it will be achieved, at least your moving in a direction of travel you can plan for and understand where you are likely to finish.
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